APPLICATION UNDER PART IV OF THE COMPANIES' CREDITORSARRANGEMENTACT, R.S.C. 1985, c. C-36 AS AMENDED

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1 ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENTACT, R.S.C. 1985, C. c-36, AS AMENDED CourtFile No: CV L AND IN THE MATTER OF JAPAN AIRLINES CORPORATION, JAPAN AIRLINES INTERNATIONAL CO., LTD., AND JAL CAPITAL CO., LTD. Applicants APPLICATION UNDER PART IV OF THE COMPANIES' CREDITORSARRANGEMENTACT, R.S.C. 1985, c. C-36 AS AMENDED FIRST REPORT OF THE INFORMATION OFFICER DELOITTE AND TOUCHE INC. JULY 30, 2010 Fasken Martineau DuMoulin LLP Barristers and Solicitors Patent and Trade-mark Agents 333 Bay Street, Suite 2400 Bay Adelaide Centre, Box 20 Toronto, Ontario Canada M5H 2T6 Stuart Brotman (LSUC No D) Telephone Facsimile Solicitors for the Information Officer, Deloitte and Touche Inc. DM TOR/ /

2 INTRODUCTION 1. On January 19, 2010, Japan Airlines Corporation, including wholly-owned subsidiaries Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd. (collectively "JAL" or the "Company" ), cornmenced proceedings under the Corporate Reorganization Act of Japan (Kaisha Kosei Ho) (the "JRA") before the Tokyo District Court, Civil Department No.8 ("Japan Proceeding"). 2. Pursuant to the commencement of proceedings under the JRA, the Tokyo District Court (the "Japanese Court") appointed the Enterprise Turnaround Initiative Corporation of Japan ("ETIC"), a find established by the Japanese government to help distressed entities, and Eiji Katayama as trustees (collectively, the "Trustees") in the Japan Proceeding, with full authority to administer JAL's assets, and ultimately, formulate a plan of reorganization. 3. On January 19, 2010, Eiji Katayama (the "Foreign Representative"), sought certain protections in the United States pursuant to Chapter 15 of Title 11 of the United States Bankruptcy Code ("Bankruptcy Code"). On February 17, 2010, the U.S. Bankruptcy Court granted a recognition order recognizing the Foreign Representative and the Japan Proceeding as a foreign main proceeding pursuant to Chapter 15 of the Bankruptcy Code ("Chapter 15 Proceedings"). 4. On April 30, 2010, the Foreign Representative brought an application (the "CCAA Proceeding") before the Canadian Court pursuant to Part IV of the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (the "CCAA"), and obtained an order, which among other things: (i) recognized the Japan Proceeding as a "foreign main proceeding"; (ii) granted a stay of proceedings against the Company; and (iii) appointed Deloitte & Touche Inc. ("Deloitte") as Information Officer (the "Canadian Recognition Order"). A copy of the Canadian Recognition Order is attached as Exhibit "A". 5. Following its appointment as Information Officer, Deloitte, in accordance with Section 47 of the CCAA and paragraph 24 of the Recognition Order, coordinated the publication of 2

3 notice of this CCAA Proceeding and the Japan Proceeding in the Globe and Mail (National Edition) on May 10 and May 17, The Canadian Recognition Order requires that the Information Officer report to the Court at such times and intervals as it deems appropriate and, in any event, at least once every three months. This report is filed pursuant to the requirements of the Canadian Recognition Order. 7. The purpose of this First Report of the Information Officer (the "First Report") is to provide the Canadian Court with information concerning the following: background on JAL's business and operations globally and in Canada; update on JAL's restructuring initiatives to date; update on the Japan Proceeding and the claims process; update on foreign proceedings, including in Canada; and, the activities of the Information Officer. TERMS OF REFERENCE 8. In preparing this report, Deloitte has relied upon unaudited financial information, the Company's books and records, financial information prepared by the Company and its advisors, discussions with management of JAL and its representatives and advisors and discussions with the Trustees. In addition, Deloitte has reviewed the publicly available information filed in the Japan Proceeding and this CCAA proceeding. Deloitte has not audited, reviewed, or otherwise attempted to verify the accuracy or completeness of the information and, accordingly, Deloitte expresses no opinion or other form of assurance on the information contained in this report. 9. Certain of the information referred to in this report may consist of or include forecasts and/or projections. An examination or review of financial forecasts and projections, as outlined in the Canadian Institute of Chartered Accountants Handbook, has not been performed. Readers are cautioned that since projections are based upon assumptions about 3

4 future events and conditions that are not ascertainable, actual results will vary from the projections, even if the assumptions materialize, and the variations could be significant. 10. Deloitte has requested that JAL bring to its attention any significant matters that were not addressed in the course of its specific inquiries. Accordingly, this report is based solely on the information (financial or otherwise) made available to Deloitte. 11. All references to dollars in this report are in Canadian currency unless otherwise noted. BACKGROUND Summary ofkey elements of the Japan Proceeding 12. Included in the application material for the Canadian Recognition Order was the affidavit of the Foreign Representative, dated April 12, 2010 (the "Katayama Affidavit"). The Katayana Affidavit contains a high-level summary of the JRA process including; Once the formal commencement order is issued by the Japanese Court, restrictions are imposed on the rights and interest of various parties, including creditors, lien holders and equity groups. Under the Japan Proceeding, the Japanese Court will designate one, or multiple, trustees who assume full responsibility for managing JAL's restructuring and reorganization plan. Under the JRA, a trustee is vested with powers to operate the debtor's business and to administer and dispose of the debtor's property, regardless of location. A reorganization plan must be submitted within one year of the commencement order, which period may be extended twice by the Japanese Court for just cause. Under the JRA, generally a plan must be approved by the following creditor classes: (i) a majority of the debtor's unsecured creditors by aggregate claim amount; and (ii) two-thirds of the debtor's secured creditors by aggregate claim amount. If the required votes in favor of approval of the plan are not obtained by the respective classes, the Japanese Court may either terminate the proceedings, or as 4

5 an alternative, confirm the plan over dissenting creditors. The JRA provides the Japanese Court with a " cram down" mechanism which allows the Japanese Court to unilaterally amend the plan in certain circumstances. 13. Japan adopted the UNCITRAL Model Law on Cross-Border Insolvency in JAL Company Overview 14. JAL, one of the world's largest air carriers, provides air transportation, cargo and other transportation services to millions of customers globally. JAL has been in operations since 1951 and currently has operations in 34 countries including Canada. JAL's corporate headquarters and registered head offices are located in Tokyo. The majority of JAL' s assets, employees, creditors and decision making are located in Japan. 15. Japan Airlines Corporation's shares were previously traded on the Tokyo Stock Exchange in Japan until their delisting in February 2010 as a result of the Japan Proceeding. 16. During 2009, JAL provided international passenger service to approximately 11 million passengers and Japanese domestic passenger service to approximately 41 million passengers. JAL's domestic passenger business is the largest in Japan, operating approximately 930 flights daily from over 60 airports. JAL also has a strong international presence with hubs in London, Beijing, New York, Los Angeles, and Hong Kong. JAL's international passenger business maintains a network serving 159 cities in 34 countries with approximately 4,000 flights weekly on 258 routes. 17. JAL employs approximately 50,000 employees in its consolidated entities as of March 31, 2009, of which approximately 92% are imion-represented pursuant to eight collective bargaining agreements. 18. JAL is an airline services company that, together with its subsidiaries, operates in five primary business segments: 1) air transportation business; 2) airline-related businesses such as cargo, in-flight meal preparation, and aircraft maintenance; 3) travel services; 4) credit 5

6 card and leasing services business; and, 5) other businesses such as hotel operations, wholesaling and retailing, real estate, printing, construction, teinp staffing, and information and advertising. 19. For the year ended March 31, 2009, JAL reported consolidated operating revenues of USD$19. 8 billion and consolidated EBITDA of USD$684 million. North and South America operating revenues from overseas operations were USD$2.7 billion, which represented 13.8% of operating revenues from overseas operations as a percentage of consolidated operating revenues. JAL Is Canadian operations 20. JAL operates internationally on a consolidated basis with all decision making being made in Japan. There are no stand alone Canadian operations, and all Canadian operations are fully integrated into JAL's global network. 21. JAL conducts operations in Canada from its main office in Vancouver, with satellite offices at Vancouver International Airport, Toronto Pearson International Airport and Montreal Pierre Elliot Trudeau International Airport. JAL operates daily passenger flights to and from Vancouver International Airport and Tokyo's Narita Airport. JAL also transports air freight to and from Vancouver in the belly-hold of their passenger aircraft. There are no other passenger or cargo flights to other airports in Canada. In Toronto and Montreal, JAL coordinates the movement of air freight to and from Toronto and Montreal via flights either from Chicago or New York. There are 37 employees in Canada, none of whom are unionized. 22. JAL's revenue from Canadian operations in 2009 was $60 million and the value of JAL's assets located in Canada was 50 million. 6

7 JAL'S RESTRUCTURING INITIATIVES 23. JAL's goal is to restructure the business to withstand economic fluctuations by generating profits without overly relying on future traffic demand. On April 28, 2010, JAL announced the following restructuring initiatives with the goal of substantially reducing the airline's fixed costs within fiscal 2010: Withdrawal from several overseas regions; Contraction in the size of operations, including head count reduction, due to low demand; and, Utilization of smaller aircraft to improve profitability on JAL's short-haul Asia flights. 24. JAL has decided to discontinue services on 15 international routes with 86 weekly rormdtrip flights, as well as 30 domestic routes with a maximum of 58 daily roundtrip flights excluding seasonally-operated flights. This constitutes a reduction of JAL's international and domestic operations measured in available seat kilometers of 40% and 30%, respectively, when compared to fiscal Including changes made since fiscal 2009, JAL has terminated 28 international routes with the closure of 11 overseas bases. Domestically, 50 routes will be terminated along with closure of 8 offices. International route suspensions, flight frequency reductions, and office closures will be effective as of approximately October Domestic route suspensions, flight frequency reductions, and office closures will be completed in two stages during October 2010 and March JAL is estimating a reduction of approximately 16,000 jobs. JAL is utilizing several initiatives to achieve this target. In March and April 2010, an initial early retirement program helped to eliminate approximately 4,000 jobs. JAL also plans to utilize a second voluntary early retirement program this coming fall. Throughout the year contract and temporary workers' contracts will not be renewed upon expiration. JAL also plans to eliminate jobs by divesting group firms, and jobs through natural attrition. Employee 7

8 reduction efforts are expected to reduce group personnel expenses by approximately 30% in fiscal As a result of the decreased number of routes and flight frequency, JAL plans to retire their Boeing and Airbus aircraft by the end of the current fiscal year. The use of smaller aircraft is expected to improve profitability on their short-haul Asia flights. Aircraft configuration changes will also be made to maximize profitability on specific routes based on demand. 27. From the material and correspondence reviewed by the Information Officer it is expected that there will be no material impact on JAL's Canadian operations as a result of the restructuring initiatives noted above. UPDATE ON JAPAN PROCEEDING 28. On May 25, 2010, JAL filed a petition with the Tokyo District Court, pursuant to Article 184(4) of the JRA, to extend the due date by which the Trustees should submit the proposed reorganization plan. On the same date, the Court rendered an order to change the due date from June 30, 2010, to August 31, The purpose of the extension is to provide additional time for JAL to improve its profitability through cost reductions initiatives while improving the firmness and certainty of expected results. JAL continues to review additional restructuring initiatives including; eliminating additional flight lines, improving strategic alliances, restructuring the cargo business, reducing fixed costs associated with flight equipment and facilities, reviewing procurement and management systems, innovating the IT system, restructuring marketing initiatives, reorganizing affiliate companies, and improving manpower planning. 30. JAL advised that there will be no cash -flow issues associated with the extension and there will be no necessity for additional finding. 8

9 31. On April 30, 2010 and May 7, 2010, the Japanese Coiut rendered an order to change the due dates for the submission and denial of filed reorganization claims as follows: Due date for the submission of the admission and denial of filed reorganization claims to the Japanese Court extended from April 30, 2010 to May 28, 2010; Ordinary period for investigation of filed reorganization claims extended from May 10 to May 24, 2010 to May 31 to June 14, 2010; Due date by which JAL, creditors who filed reorganization claims and shareholders may submit their proposed reorganization plan extended from May 31, 2010 to Jime 23, The Information Officer is not aware of any creditors that have opposed JAL's restructuring process to date, nor is the Information Officer aware of any creditors that have submitted a plan of reorganization. The Information Officer has read that one shareholder has submitted an unsolicited plan; however there is uncertainty as to whether the plan complies with applicable law. UPDATE ON CANADIAN AND OTHER FOREIGN PROCEEDINGS Canada Financial Matters 33. In the Katayama Affidavit the Foreign Representative stated that "The Applicants intend to continue malting ordinary course payments to their trade creditors and contract counterparties in Canada, including airport authorities, vendors, contractors and trade creditors..." for their continued supply of goods and services and that these stakeholders will be unaffected by the reorganization proceedings. The Katayama Affidavit also confirmed that JAL intended to continue to pay all employee related costs in the ordinary course. 34. The Information Officer has requested and received confirmation from JAL that these staleholders have, in fact, been paid in the ordinary course since commencement of the CCAA Proceeding. 9

10 35. In addition, the Information Officer has requested and received from JAL a cash flow statement showing actual cash flows in respect of the Canadian operations to the end of May, 2010 and projected cash flow to the end of December, A copy of that statement is attached hereto as Appendix A. The Information Officer was not involved in the preparation of this cash flow statement. The provided cash flow statement reflects that the Canadian JAL operations have had and will continue to have sufficient cash inflows to fiord their required cash outflows through December Proposed Class Proceedings 36. As disclosed in the Katayama Affidavit, there are two categories of proposed class proceedings that have been commenced against JAL and other airlines in Canada: one in Ontario in connection with an alleged conspiracy to fix the price of transpacific international long-haul air passenger services (the "Passenger Proceeding") and three (one in each of Ontario, Quebec and British Columbia) in connection with an alleged conspiracy to fix the price of international air freight shipping services (the "Cargo Proceedings"). Similar or related proceedings were also commenced against JAL and other airlines in the United States and Australia. 37. JAL has been in negotiations with the plaintiffs counsel in the Cargo Proceedings for some time. The Information Officer has been informed that those negotiations resulted in the execution of a settlement agreement for the Cargo Proceedings as at July 8, 2010 (the "Cargo Agreement "). JAL sought and obtained permission from the Japanese Court to execute the Cargo Agreement (the "Authorization Order "). Pursuant to the Cargo Agreement, JAL agreed, among other things and without admission of liability, to make a settlement payment for the benefit of the proposed class. However, as the Authorization Order and the terms of the Cargo Agreement are presently under strict confidentiality restrictions, the Information Officer is not able to provide a copy of the Authorization Order or any further details about the Cargo Agreement at this time. The Passenger Proceeding has not been settled. 10

11 38. The rules governing Canadian class proceedings require that the Cargo Agreement be approved by the court before the settlement can be implemented. The Information Officer is informed that the parties to the Cargo Proceedings will be bringing motions first for approval of the notice of settlement and settlement approval hearing (the "Notice Motion") and, subsequently, for approval of the Cargo Settlement and for authorization to implement the Cargo Settlement (the "Approval Motion"). The Notice and Approval Motions will be closely coordinated with similar motions being brought in the United States in connection with the settlement by JAL of the U.S. Cargo Proceeding. It is anticipated that the Notice Motion will be filed within the next 30 days. The tuning of the Approval Motion will be contingent on when the court issues a decision on the Notice Motion. Further details with respect to the Cargo Settlement will be disclosed in connection with the Notice and Approval Motions. In particular, the Cargo Settlement will be filed as part of the Notice Motion. Canadian Claims Submitted in Japanese Proceedings 39. There is no claims process in the CCAA Proceeding as all claims are being administered in the Japan Proceeding. 40. The Information Officer is advised by JAL that the representative plaintiffs in the Passenger Proceeding and in all three of the Cargo Proceedings filed proofs of claim in the Japanese claims process and that all such claims have been denied by the Trustees. United States 41. On July 22, 2010, the Foreign Representative issued a status report detailing the status of the US proceedings generally and the settlement of certain antitrust litigation in the United States. A copy of this report is attached as Appendix B to this report. 42. The Information Officer has nothing further to report with respect to the US proceedings at this time. 11

12 United Kingdom 43. The Information Officer is not aware of any material updates in regard to JAL's proceedings in the U.K. Australia - New Foreign Proceedings 44. On June 30, 2010, pursuant to s. 6 of the Cross-Border Insolvency Act 2008 and clause 1 of Article 17 of the UNCITRAL Model Law on Cross-Border Insolvency, the Federal Court of Australia (New South Wales district registry, General Division) recognized the Japan Proceeding as a foreign main proceeding. Furthermore, pursuant to s.6 of the Cross-Border Insolvency Act 2008 and Article 21(1)(e) of the UNCITRAL Model Law, the Australian court ordered that the administration and realization of all of JAL's assets located in Australia be entrusted to the Trustees. Attached hereto as Appendix C is a copy of a notice provided by JAL of the malting of an Order in Australia recognizing the Japan Proceeding as a foreign main proceeding. 45. As noted above, JAL is involved in similar class action proceedings involving air freight shipping services in Australia. The Information Officer is not aware of the progress of such litigation or any settlement discussions therein. 12

13 ACTIVITIES OF THE INFORMATION OFFICER 46. Since the date of the Recognition Order, the Information Officer's activities have included: Reviewing the draft materials for this CCAA Proceeding and cominuuicating with its counsel Fasken Martineau DuMoulin LLP ("Faskens") regarding same; Preparing for and attending at Court for the hearing requesting the Canadian Recognition Order; Posting a copy of the Court-filed documents in this CCAA Proceeding to the Information Officer's website at Coordinating publication of the CCAA Proceeding and Japan Proceeding in the national edition of the Globe and Mail on May 10 and May 17, 2010, as required by section 47 of the CCAA and paragraph 24 of the Canadian Recognition Order; Daily review and monitoring of the materials filed in the Japan Proceeding and communicating with Faskens regarding same; Various discussions and correspondence with Davies Ward Phillips & Vineberg LLP ("Davies"), Canadian counsel to JAL; Participating in conference calls with management of the Company, Davies, the Foreign Representative and the Company's management and advisors to discuss matters relevant to the Japan and CCAA Proceedings; and, Preparing this Report and communicating with Faskens regarding same. 13

14 ALL OF WHICH IS RESPECTFULLY SUBMITTED at Toronto, Ontario this 30'' day of July, DELOITTE AND TOUCHE 1NC. In its capacity as Information Officer of Japan Airlines Corporation Per: Paul van Eyk 14

15 EXHIBIT "A"

16 ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) Court File No. CV L THE HONOURABLE MR. JUSTICE CAMPBELL FRIDAY, THE 30TH DAY OF APRIL, 2010 IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED AND IN THE MATTER OF JAPAN AIRLINES CORPORATION, JAPAN AIRLINES INTERNATIONAL CO., LTD., AND JAL CAPITAL CO., LTD. Applicants APPLICATION UNDER PART IV OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED. RECOGNITION ORDER THIS APPLICATION, made by Eiji Katayama ( the "Foreign Representative") in respect of and on behalf of Japan Airlines Corporation, Japan Airlines International Co. Ltd. and JAL Capital Co., Ltd. ( the "Applicants "), pursuant to Part IV of the Companies' Creditors Arrangement Act, R.S.C, 1985, c. C-36, as amended (the "CCAA") for an order recognizing the Japan Proceeding (as defined below) as a foreign main proceeding and certain other relief was heard this day at 330 University Avenue, Toronto, Ontario M5G 1 E6. ON READING the Notice of Application, the affidavit of Eiji Katayama sworn April 12, 2010 (the "Affidavit"), and the consent of Deloitte & Touche Inc. to serve as

17 2 Information Officer in these proceedings, filed, and on hearing the submission of counsel for the Applicants, no else appearing : Mcf ^D ca G (fie ^al j^ ^J n SERVICE V l G^. 1. THIS COURT ORDERS that the time for service of the Notice of Application and the Application Record herein is hereby abridged and validated so that this Application is properly returnable today, and that further service thereof is hereby dispensed with. RECOGNITION OF JAPAN PROCEEDINGS 2. THIS COURT ORDERS AND DECLARES that the proceedings commenced by the Applicants in Japan under the Corporate Reorganization Act of Japan (Kaisha Kosei Ho) (the "JRA") before the Tokyo District Court, Civil Department No. 8 (the "Japan Proceeding") be and are hereby recognized as a "foreign proceeding" for the purposes of the CCAA and the Applicants are entitled to relief under the CCAA. 3. THIS COURT ORDERS AND DECLARES that the Japan Proceeding is a "foreign main proceeding" for the purposes of the CCAA, and the Initial Order, as defined below, is given full force and effect in all provinces and territories of Canada for the purposes of Part IV of the CCAA. 4. THIS COURT ORDERS AND DECLARES that Eiji Katayama is a "foreign representative" in the Japan Proceeding in respect of the Applicants for the purposes of the CCAA (the "Foreign Representative") and is entitled to bring this Application. 5. THIS COURT ORDERS that the automatic stay of proceedings granted in favour of the Applicants, and the Applicants' assets, business and undertaking in the Japan Proceeding, is hereby recognized by this Court, and further orders that such stay of proceedings shall be in full force and effect in Canada as if such stay of proceedings had been ordered by this Court. 6. THIS COURT ORDERS AND DECLARES that the order of the Tokyo District Court, Civil Department No. 8 made on January 19, 2010 in respect of the Applicants

18 3 (the "Initial Order") is recognized and given full force and effect in all provinces and territories of Canada. NO PROCEEDINGS AGAINST THE APPLICANT OR THE PROPERTY 7. THIS COURT ORDERS that except as provided in paragraph 8 herein, during the pendancy of the Japan Proceeding ( the "Stay Period "), no proceeding or enforcement process in any court or tribunal (each, a "Proceeding") shall be commenced or continued against or in respect of the Applicants' or the Foreign Representative's current and future business, assets, undertakings and properties of every nature and kind whatsoever, and wherever situate including all proceeds thereof (the "Property"), except with the written consent of the Applicants or with leave of this Court, and any and all Proceedings currently under way against or in respect of the Applicants or the Foreign Representative's or the Property are hereby stayed and suspended pending further Order of this Court. 8. THIS COURT ORDERS that with respect to the following Proceedings: (a) (b) (c) (d) Court File No. CV , Ontario Superior Court of Justice, Riediger et al. v. Air Canada et al., Court File No, S067490, Supreme Court of British Columbia (Vancouver Registry), McKay v. ACE Aviation Holdings Inc., et al., Court File No , Quebec Superior Court (District of Montreal), Cartise Sports Inc. v. Deutsche Lufthansa AG et al., and Court File No CP, Ontario Superior Court of Justice, Aide Brands Inc. et a/ v. Air Canada et al. (collectively, the "Proposed Class Proceedings"), nothing in this Order shall stay or otherwise suspend the Proposed Class Proceedings against any party to the Proposed Class Proceedings except the Applicants.

19 4 PROCEEDINGS AGAINST DIRECTORS AND OFFICERS 9. THIS COURT ORDERS that during the Stay Period, and except as permitted by the CCAA, no Proceeding may be commenced or continued against any of the former, current or future directors or officers of the Applicants with respect to any claim against the directors or officers that arose before the date hereof and that relates to any obligations of the Applicants whereby the directors or officers are alleged under any law to be liable in their capacity as directors or officers for the payment or performance of such obligations. NO EXERCISE OF RIGHTS OR REMEDIES 10. THIS COURT ORDERS that during the Stay Period, all rights and remedies of any individual, firm, corporation, governmental body or agency, or any other entities (all of the foregoing, collectively being " Persons" and each being a "Person ") against or in respect of the Applicants or affecting the Property, are hereby stayed and suspended except with the written consent of the Applicants, or leave of this Court, provided that nothing in this Order shall (i) empower the Applicants to carry on any business which the Applicants are not lawfully entitled to carry on, (ii) affect such investigations, actions, suits or proceedings by a regulatory body as are permitted by Section 11.1 of the CCAA, (iii) prevent the filing of any registration to preserve or perfect a security interest, (iv) prevent the registration of a claim for lien, or (v) prevent a creditor who holds security on aircraft objects (as defined in the CCAA) or a lessor of aircraft objects from taking possession of the aircraft objects in the circumstances contemplated in Section of the CCAA. NO INTERFERENCE WITH RIGHTS 11. THIS COURT ORDERS that during the Stay Period, no Person shall discontinue, fail to honour, alter, interfere with, repudiate, terminate or cease to perform any right, renewal right, contract, agreement, licence or permit in favour of or held by the Applicants, except with the written consent of the Applicants or leave of this Court.

20 5 CONTINUATION OF SERVICES 12. THIS COURT ORDERS that during the Stay Period, all Persons having oral or written agreements with any of the Applicants or statutory or regulatory mandates for the supply of goods and/or services, including without limitation all computer software, communication and other data services, centralized banking services, payroll services, insurance, employee benefits, transportation services, utility or other services to the Applicants, are hereby restrained until further Order of this Court from discontinuing, altering, interfering with or terminating the supply of such goods or services as may be required by the Applicants (including, where a notice of termination may have been given with an effective date after the date of this Order), provided in each case that the normal prices or charges for all such goods or services received after the date of this Order are paid by the Applicants in accordance with normal payment practices of the Applicants or such other practices as may be agreed upon by the supplier or service provider and the Applicants or as may be ordered by this Court. APPOINTMENT OF INFORMATION OFFICER 13. THIS COURT ORDERS that Deloitte & Touche Inc. is hereby appointed as the information officer in respect of the Applicants (the "Information Officer") as an officer of this Court to monitor the assets, businesses and affairs of the Applicants in Canada and the Japan Proceeding and all foreign proceedings in respect of the Applicants commenced in the United States and United Kingdom (each, an "Other Foreign Proceeding") and report thereon to this Court from time to time as the Information Officer deems appropriate. 14. THIS COURT ORDERS that the Information Officer shall report to this Court at such times and intervals as the Information Officer deems appropriate and, in any event, shall deliver a report to the Court at least once every three months outlining the status of the Japan Proceeding and the Other Foreign Proceedings, and such other information as the Information Officer believes to be material.

21 6 15. THIS COURT ORDERS that the Information Officer is hereby empowered and authorized, but not obligated, to provide the Applicants with reasonable guidance and assistance so as to facilitate the Applicants' compliance with obligations under the CCAA. 16. THIS COURT ORDERS that the Information Officer shall not take possession of the Property and shall take no part whatsoever in the management or supervision of the management of the business of the Applicants ( the "Business") and shall not, by fulfilling its obligations hereunder, be deemed to have taken or maintained possession or control of the Business or Property, or any part thereof. All employees of the Applicants shall remain the employees of the Applicants and the Information Officer shall not be liable for any employee-related liabilities, including wages, severance pay, termination pay, vacation pay, and pension or benefit amounts. 17. THIS COURT ORDERS that the Foreign Representative and the Information Officer shall incur no liability or obligation as a result of the appointment of the Information Officer or the fulfillment of the duties of the Information Officer in carrying out the provisions of this Order, save and except for any gross negligence or wilful misconduct on their part, and no action or other proceeding shall be commenced against the Foreign Representative or the Information Officer relating in any way to this proceeding, except with prior leave of this Court obtained on not less than seven (7) days notice to the Information Officer and the Foreign Representative. 18. THIS COURT ORDERS that the Information Officer and counsel to the Information Officer shall be paid their reasonable fees and disbursements, in each case at their standard rates and charges, by the Applicants as part of the costs of these proceedings. The Applicants are hereby authorized and directed to pay the accounts of the Information Officer and counsel for the Information Officer on a bi-weekly basis. 19. THIS COURT ORDERS that the Information Officer and its legal counsel shall pass their accounts from time to time, and for this purpose the accounts of the Information Officer and its legal counsel are hereby referred to a judge of the Commercial List of the Ontario Superior Court of Justice. For certainty, the Information

22 7 Officer, as officer of this Court, shall not be required to pass its accounts or the accounts of its legal counsel in the Japan Proceeding or in any Other Foreign Proceeding. 20. THIS COURT ORDERS that the Information Officer and counsel to the Information Officer shall be entitled to the benefits of and are hereby granted a charge (the "Administration Charge ") on the Property, which charge shall not exceed an aggregate amount of $250,000 as security for their professional fees and disbursements incurred at the normal rates and charges of the Information Officer and such counsel, both before and after the making of this Order in respect of these proceedings. 21. THIS COURT ORDERS that the filing, registration or perfection of the Administration Charge shall not be required, and that the Administration Charge shall be valid and enforceable for all purposes, including as against any right, title or interest filed, registered, recorded or perfected subsequent to the Administration Charge coming into existence, notwithstanding any such failure to file, register, record or perfect. 22. THIS COURT ORDERS that the Administration Charge shall constitute a charge on the Property and shall rank in priority to all other security interests, trusts, liens, charges and encumbrances, claims of secured creditors, statutory or otherwise in favour of any Person. 23. THIS COURT ORDERS that nothing in this Order shall prevent the Information Officer from acting as an interim receiver, a receiver, a receiver and manager, or a trustee in bankruptcy of the Applicants, or the Property, as long as, the Applicants consent to such appointment. SERVICE AND NOTICE 24. THIS COURT ORDERS that the Information Officer shall, within ten (10) business days of the date of entry of this Order, publish notice of these proceedings substantially in the form attached hereto as Schedule "A", in the National Edition of the Globe and Mail once a week for two consecutive weeks and shall promptly send a copy

23 8 of this Order (a) to all parties filing a Notice of Appearance in respect of this Application, and (b ) to any other interested Person requesting a copy of this Order; and the Foreign Representative be and is hereby relieved of its obligation to publish notice of this proceeding under subsection 53(b) of the CCAA. 25. THIS COURT ORDERS that the Applicant and the Information Officer be at liberty to serve this Order, any other materials and orders in these proceedings, any notices or other correspondence, by forwarding true copies thereof by prepaid ordinary mail, courier, personal delivery or electronic transmission to the Applicants' creditors or other interested parties at their respective addresses as last shown on the records of the Applicants and that any such service or notice by courier, personal delivery or electronic transmission shall be deemed to be received on the next business day following the date of forwarding thereof, or if sent by ordinary mail, on the third business day after mailing. 26. THIS COURT ORDERS that the Applicants, the Information Officer, and any party who has filed a Notice of Appearance may serve any court materials in these proceedings by ing a PDF or other electronic copy of such materials to counsels' addresses as recorded on the Service List from time to time, in accordance with the E-filing protocol of the Commercial List to the extent practicable, and the Information Officer may post a copy of any or all such materials on its website. GENERAL 27. THIS COURT ORDERS that the Applicants and the Information Officer may from time to time apply to this Court for advice and directions in the discharge of its powers and duties hereunder. 28. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal, regulatory or administrative body having jurisdiction in Canada, the United States, the United Kingdom, and Japan to give effect to this Order and to the Applicants, and its respective agents, in carrying out the terms of this Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully requested to

24 9 make such orders and to provide such assistance to the Applicants as may be necessary or desirable to give effect to this Order, or to assist the Applicants and their respective agents in carrying out the terms of this Order. 29. THIS COURT ORDERS that the Applicants be at liberty and are hereby authorized and empowered to apply to any court, tribunal, regulatory or administrative body, wherever located, for the recognition of this Order and for assistance in carrying out the terms of this Order. 30. THIS COURT ORDERS that any interested party may apply to this Court to vary or amend this Order on not less than seven (7) days notice to the Applicants and the Information Officer and any other party or parties likely to be affected by the order sought or upon such other notice, if any, as this Court may order. 31. THIS COURT ORDERS that this Order and all of it provisions are effective as of 12:01 a.m. Eastern Standard/Daylight Time on the date of this Order. ENTERED AT / INSCRIT A, TORONTO ON / BOOK NO: LE / DANS LE REGISTRE NO.; APR PER I Bart; C^

25 SCHEDULE A Court File No. CV L ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENTACT, R.S.C. 1985, c. C-36, AS AMENDED AND IN THE MATTER OF JAPAN AIRLINES CORPORATION, JAPAN AIRLINES INTERNATIONAL CO., LTD. AND JAL CAPITAL CO., LTD. APPLICATION UNDER PART IV OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED PLEASE TAKE NOTICE that this Notice is being published pursuant to an order of the Ontario Superior Court of Justice (the "Canadian Court") made on April n, PLEASE TAKE FURTHER NOTICE that on January 19, 2010, Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd. (collectively, the "Debtors") obtained an Order from the Tokyo District Court, Civil Department No.8 (the "Japan Court") that, among other things, commenced corporate reorganization proceedings for the Debtors under the Japanese Corporate Reorganization Act (the "Japan Proceeding") and appointed Mr. Eiji Katayama as foreign representative. PLEASE TAKE FURTHER NOTICE that an order has been issued by the Canadian Court under Part IV of the Companies' Creditors Arrangement Act (the "Recognition Order") that, among other things: i) recognizes the Japan Proceeding as a foreign main proceeding ; ii) stays all claims against the Debtors in Canada; and iii) appoints Deloitte and Touche Inc. as Information Officer of the Debtors. PLEASE TAKE FURTHER NOTICE that Persons who wish to receive a copy of the Recognition Order or any further information in respect thereof or in respect of the matters set out in this Notice should contact the Information Officer, Deloitte and

26 z Touche Inc. (Attention: Clark Lonergan, telephone : (416) , facsimile: (416) or at PLEASE TAKE FURTHER NOTICE that the Recognition Order and any other orders that may be issued by the Canadian Court can be viewed at www. com. DATED this day of, 2010 at Toronto, Canada DELOITTE & TOUCHE INC. COURT-APPOINTED INFORMATION OFFICER OF THE DEBTORS

27 IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED Court File No. CV L AND IN THE MATTER OF JAPAN AIRLINES CORPORATION, JAPAN AIRLINES INTERNATIONAL CO., LTD., AND JAL CAPITAL CO., LTD.. ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST Proceeding commenced at Toronto RECOGNITION ORDER DAVIES WARD PHILLIPS & VINEBERG LLP 1 First Canadian Place Suite 4400 Toronto, ON M5X Natasha MacParland (LSUC # 42383G) Tel: Fax: Lawyers for the Applicants

28 APPENDIX "A"

29 Japan Airlines International Co., Ltd. Combined Monthly Cash FIOW Forecast 2010 Monthly January February March April May June July August September October November December Total Receipts Air Ticket Sales Inventory5ales Asset sales 8,869,308 6,185,330 7,305,272 5,153,203 5,183,937 5,822,404 5,822,404 5,822,404 5,822,404 5,822,404 5,822,404 5,822,404 73,453,880 Total Receipts 8,869,308-6,195,3W 7,305,272 5, , ,82Z,404 5, 822,404 5,822,404 5,822,404 5,822,404 5,822,404 5,822,404 73,453,880 Disbursements Direct Costs: Over0i9ht Fee Landing Fee Airport Facility Charge Security Charge Airport Launge In-flight Meal & Service AccommudaUan &Tour Aircraft Parts Repair Fuel Oil 523, , , , , ,]94 422, , , , , ,148 5,312,316 71,286 75,038 69,619 54,148 59,950 58,016 62,031 58,016 59,950 59,950 58,016 59, , , , , , , , , , , , , ,902 1,630,824 15,296 15,296 15,296 15,290 15,290 15,290 15,290 15,290 15,290 15,290 15,290 15, ,498 3,291 3,291 3,291 3,291 3,291 3,291 3,291 3,291 3,291 3,291 1,530 1,530 35, , , , , , , , , , ,41] 163, ,417 1,961,004 27,658 27,658 27,658 27,658 27,658 27,658 27,658 2],658 27,658 27,658 27,658 27, ,896 23,473 23,473 23,473 23,473 23,473 23,473 23,473 23,473 73,473 23,473 23,473 23, ,676 37,420 22,857 27,599 25,549 37,440 26,302 26,302 26,302 26,302 26,302 26,302 26, ,979 Indirect Costs: Agent Service Fee Off. Freight Rental Communication Repairs & Maintenance Supplies Travel Expense Insurance Others 240, , , , , , , , , , , ,654 2, 715,769 37,648 37,648 37,648 37,648 37,648 37,648 37,648 37,648 37,648 37,648 31,748 31, ,976 1,531 1,531 1,531 1,531 1,531 1,531 1,531 1,531 1,531 1,531 1,002 1,002 17,314 7,015 7,015 7,015 7,015 7,015 7,015 7,015 7,015 7,015 7,015 5,982 5,982 82,114 4,546 4,546 4,546 4,842 4,842 4,842 4,842 4,842 4,842 4,842 4,133 4,133 55, ,442 1,852 1,652 1,852 1,852 1,852 1,852 1,852 1,852 1,852 1,852 1,335 1,335 21,190 3,191 3,191 3,191 3,191 3,191 3,191 3,191 3,191 3,191 3,191 1,764 1,764 35,438 2,332 2,332 2,332 1,822 1,822 1,822 1,822 1,822 1,822 1,822 1,822 1,822 23, ,266 Payroll & Benefits: Net Payroll (Salary and Hourly) Payroll Benefits Welfare Expense 123, , , , , , , , , , , ,940 1,487,280 8,769 8,769 8,769 8,769 8,769 8,769 8,769 8,769 8,769 8,769 8,769 8, ,228,113,418 48,418 48,418 48,418 48,418 48,418 48,418 48,418 48,418 48,418 48,418 46, ,016 Total Disbursements 481,759 1,438,924 1,383,556 1,369,917 1,364,389 1, ,343,676 1,350,274 1,352,695 1,340,595 1,338,812 1,283,902 16,392,361 Net Cash Flow 7,387,549 4,746,406 5,921,716 3,783,285 3,819,548 4,478,544 4,4]8, ,130 4,469,709 4,481,809 4, , ,061,520

30 APPENDIX "B"

31 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: JAPAN AIRLINES CORPORATION, et al. Debtors in a Foreign Proceeding] Debtors. Chapter 15 Case No (JMP) Jointly Administered STATUS REPORT OF THE FOREIGN REPRESENTATIVE REGARDING THE SETTLEMENT OF CERTAIN ANTITRUST LITIGATION Eiji Katayama (the "Foreign Representative") as foreign representative to Japan Airlines Corporation, Japan Airlines International Co., Ltd. ("JALI") and JAL Capital Co., Ltd. (collectively, the "Debtors"), for the purpose of providing the Court information regarding the Debtors' pending reorganization cases in Japan and the settlement of certain antitrust claims against JALI currently pending before the United States District Courts for the Eastern District of New York and the Northern District of California, hereby submits this status report (the "Status Report"). This Status Report is intended for information purposes only, and no action is requested of the Court. Background 1. On January 19, 2010 (prevailing Tokyo time), the Debtors voluntarily filed for commencement of a corporate reorganization process in the Tokyo District Court, Civil Department No. 8 (the "Japan Proceeding"), under the Corporate Reorganization Act of Japan (Kaisha Kosei Ho). In connection with commencement of the Japan proceeding, the Tokyo District Court appointed the Foreign Representative and the Enterprise Turnaround Initiative The Debtors in these chapter 15 cases are: Japan Airlines Corporation, Japan Airlines International Co., Ltd., and JAL Capital Co., Ltd. The location of the Debtors' corporate headquarters and the service address for all of the Debtors is: JAL Building, 2-4-I1 Higashi Shinagawa, Shinagawa-ku, Tokyo, Japan, Attn: Legal Department. K&E

32 Corporation of Japan as trustees in the Japan Proceeding, with full authority to administer the Debtors ' assets and, ultimately, formulate a plan of reorganization. 2. To better facilitate an efficient corporate restructuring in the Japan Proceeding, on January 19, 2010 (prevailing New York time ) (the "Petition Date"), the Foreign Representative also sought certain protections in the United States pursuant to chapter 15 of title 11 of the United States Code (the "Bankruptcy"). 3. On February 17, 2010, the Court entered the Order Pursuant to 11 U.S.C. 1504, 1515, 1517 and 1520 Recognizing Foreign Representative and Foreign Main Proceeding [Docket No. 49] (the "Recognition Order "), pursuant to which the Japan Proceeding was recognized as a "foreign main proceeding " pursuant to chapter 15 of the Bankruptcy Code. Moreover, the Court also recognized the Foreign Representative as the Debtors' "foreign representative " for Bankruptcy Code purposes, thereby authorizing the Foreign Representative to administer the Debtors ' United States assets. 4. Finally, the Recognition Order, among other things, (a) applied the automatic stay of section 362 of the Bankruptcy Code with respect to the Debtors and the property of the Debtors in the territorial jurisdiction of the United States and (b) further enjoined all persons and entities from commencing or continuing any judicial, administrative or any other action or proceeding involving or against the Debtors or their assets or proceeds thereof that are located in the United States. Status of the Japan Proceeding 5. As set forth above, the Debtors commenced the Japan Proceeding on January 19, Since that time, the Foreign Representative, in conjunction with the Debtors K&E

33 and their advisors, has progressed toward development of a comprehensive restructuring plan to reorganize the Debtors' balance sheets and operations. 6. In addition, and in furtherance of the Debtors' restructuring efforts, the Foreign Representative, with the approval of the Tokyo District Court, established March 19, 2010, as the bar date for submission of claims against the Debtors. The Foreign Representative then was required to admit or object to such claims by May 28, 2010, and was entitled to an initial investigation period regarding such claims running from May 31, 2010, through and including June 14, On May 25, 2010, the Debtors announced that they anticipated submitting their restructuring plan to the Tokyo District Court and the Debtors' creditors by August 31 of this year. Although Japan's Corporate Reorganization Act permits corporate debtors as much as one year to submit a restructuring plan, the Debtors originally intended to file their restructuring plan by the end of June The brief postponement until August 31 of submission of the plan will enable the Debtors to more Rally meet their restructuring goals and return their businesses to profitability. Indeed, on June 5, 2010, the Debtors announced that their consolidated financial forecast for the fiscal year ending March 2011 anticipated a net operating profit of 22 billion ($251 million), a dramatic turnaround from the Debtors' challenging financial position at the commencement of the Japan Proceeding. 8. From an operational perspective, the Debtors have undertaken other critical restructuring activities subsequent to the Petition Date. On April 28, 2010, the Debtors announced they would discontinue 45 unprofitable routes starting September 30, 2010, to better streamline their operations. Moreover, the Debtors have offered certain employees an early retirement option, which approximately 3,500 employees accepted, reducing the Debtors' future K&E ,10 3